Question

Julie is opening a savings account at a bank that offers new clients 0.1% interest compounded quarterly. She deposits $1,700 when she opens the account.

Write an exponential expression in the form a(b)c, where b is a single value, to find the amount of money, in dollars, that will be in the account after t years. Round any decimals to the nearest hundred-thousandth and do not include dollar signs in the expression.

Answer 1

Initial amount deposited (a) = $1,700.

Rate of interest (c) = 0.1% compounded quarterly =0.001 quarterly = 0.001/4 = 0.00025.

Number of years = t.

Let us assume amount after t years would be = $b.

We know, compund interest formula.

Total balance = Deposited amount (1- rate of interrest)^time.

Plugging values in formula,

`b = a (1+c)^t`

We have a=$1700, c =0.00025.

Plugging those values, we get

`b=1700(1+0.00025)^t`

Or

`b=1700(1.00025)^t`